Zero-waste efforts, plastic reduction, and carbon-neutral supply chains – these are just some of the several ways industries and individuals are doing their due diligence to tackle climate change. Socially conscious people demand at-scale visibility about sustainability efforts from companies.
Environmental, social, and governance (ESG) accounting skills are seeing significant demand in 2021, given loads of factors, from recent scientific studies about climate change to an increasingly informed shareholder pool.
As the sustainability discussion intensifies and the requirements for tax breaks and classifications tighten, sustainability accounting will emerge from a “nice-to-have” to a “must-have” for all organizations. Certified public accountants (CPA) with ESG skills will remain in the vanguard of the competition during this demand upsurge for sustainability accounting.
The Focus on ESG Skills is Magnifying
Emissions, oil spills, and other ecological blunders have a greater impact than just earning backlash for organizations. These crises have serious financial repercussions that trigger a collapse in a company’s stock prices, leading to detrimental organizational changes. In addition, several businesses have grappled with inadequate sustainability accounting that has caused tragic outcomes.
Today, consumers continue to expect more and more from organizations. As such, businesses that fulfill ESG criteria can prevent unfortunate outcomes while also enjoying new revenue streams from a significant wave of new, eco-conscious purchasers and stakeholders.
Learning ESG accounting is an added weight and expertise for every accounting practice as it can make CPAs an attractive hire for organizations that now prioritize sustainable and comprehensive efforts.
Having a firm grip on ESG reporting can help CPAs better serve customers looking to become more eco-friendly. Moreover, it allows CPAs to maintain a competitive edge as it exhibits they’re far-sighted in their accounting skills.
CPAs Need to Buck Up
As organizations reel with pressure to become sustainable and comprehensive, there’ll be more demand for ESG-skilled accountants year over year. But, there might not be enough CPAs capable of carrying out and lead sustainability accounting as the demand rises. This emerging skills gap can put a CPA on top of the market.
Besides, becoming proficient in ESG will help CPAs be all set to act when organizations need them. They can respond to the demand quicker than their peers, who might not have the required skills to report on ESG criteria. This offers CPAs more opportunities to master ESG and sustainability accounting in the meantime.
Organizational well-being doesn’t rely only on financial metrics and strategies but also on those that echo ESG aspects. This all-inclusive approach is integral to long-term value addition. As such, risk management, strategic planning, and all relevant assurance must include all dimensions.
This means that ESG-centered risk management will be as crucial as financial tactics usually managed by CPAs. Analyzing risks related to sustainability accounting is becoming of greater concern with each passing day.
Therefore, familiarizing with enterprise risk management (ERM), as it focuses on ESG reporting and auditing, can better safeguard and support CPA practices and accounts.
Navigating the Growing Accounting Shortage in the US: Challenges and Solutions
In the United States, the accounting profession is facing an increasingly pressing challenge—the emergence of an accounting shortage.
As businesses expand, regulations evolve, and the demand for specialized skills such as ESG accounting rises, the workforce deficit in the accounting sector becomes more apparent.
- Growing Demand, Shrinking Supply: The US faces a widening gap between the rising demand for accountants and the insufficient supply of qualified professionals.
- Specialized Skills Gap: A notable shortage exists in accountants with specialized skills, particularly in emerging areas such as ESG accounting, reflecting a need for expertise in evolving financial landscapes.
- Technological Shift: Technological disruptions, including AI and automation, reshape the accounting skill set, emphasizing the importance of professionals who can seamlessly integrate technology into their practices.
- Educational Challenges: The educational system struggles to align with industry demands, with traditional accounting programs often lacking emphasis on crucial areas like ESG accounting.
- Collaborative Solutions: Industry collaboration between firms, educational institutions, and industry bodies is essential to develop programs that address current and future needs, including the integration of ESG accounting and technological literacy.
- Promoting Diversity: Encouraging diversity and inclusion within the profession broadens the talent pool, contributing to a more resilient and adaptable workforce.
- Continuous Professional Development: A culture of continuous learning is vital for accountants to stay abreast of technological advancements, regulatory changes, and emerging areas like ESG accounting.
Put It into Action
Once CPAs have developed core competencies in ESG and sustainability accounting, they can start offering these practices to their customers and convey the value of these services to prospects.
As their accounting practice develops proficiency around ESG criteria and audits, they can not only deal with challenges and hurdles associated with sustainability reporting efforts but also utilize their accounting skills to ensure a positive graph for the future.
Miles Education is a premier training institute for finance & accounting professionals looking to earn US CPA credentials. The focus of Miles Education has always been to up-skill students and professionals to help them be future-ready and enable their career progression through the US CPA qualification.
Committed to achieving this goal, today, Miles is India’s largest and #1 CPA review course! It has been instrumental in building India’s CPA ecosystem, holding offices in 9 cities and partnerships with 100+ MNCs, including all of the Big 4s.
Miles Education provides student/professional-centric services while keeping concept-based learning at its core which has helped it climb to the top ranks in the US CPA course in India.